Answer

Nannipus may be smaller in size due to selection based on less food availability, which would provide less food to build the body of the horse, or based on habitats requiring a smaller body for survival, such as in a dense thicket through which a smaller body might move more easily.

Work Step by Step

The text notes that the diversity of horses relates to habitat and diet. Try to match these up with reasons which you can imagine why selection would operate leading to smaller bodies.